Potential Partner Knocking? Here’s How to Answer the Door
by Steve Pollock

(Originally published in the Nikkei Weekly as part of the Japan Business Seminar column.)

“Hello. This is Tom Tanaka from ABC Trading Company. You have an interesting product. My company would like to introduce it to Japan.”

Many foreign executives will recognize the scouting call from a Japanese company. It starts as a promise of seemingly easy access to the Japanese market. The caller represents a well-known corporation, knows your product and wants a bit of information to share with his colleagues in Tokyo. They have great contacts, he promises, and see an interesting business opportunity.

Months later, after countless hours negotiating a non-disclosure agreement, multiple calls and meetings, and requests for reams of product information, Tom stops calling. The most you can get from him is that Tokyo is still evaluating. Unfortunately, there’s not a single sale to show for all of the effort. You don’t have the first idea about what went wrong. Was it the product? The partner? Something you said?

While there are many examples of truly successful international partnerships in Japan -- think Apple Inc. of the U.S. and Softbank Corp., U.S.-based Starbucks Coffee International and Sazaby Inc. (now Sazaby League Ltd.) -- the vast majority of scouting calls don’t lead to overnight success. So, what can you do to increase the probability of success when opportunity comes knocking?

An essential first step is to find out what (or who) is driving the interest of the Japanese company. Where did the request initiate? Who is driving the discussion from Japan and what level of seniority does he have? Does your product or service fit a strategic objective of the partner? Does it step on sacred turf? Is the caller looking for information to fill a monthly trend report? Is he trying to impress an important Japanese customer? Knowing what lies behind the request can help you set realistic expectations and decide how to proceed.

Second, use the call to initiate a two-way information flow. Too often foreign companies jump through hoops to provide data to the Japanese counterpart while failing to learn about the opportunity in Japan. Ask the caller to tell you about the competitive landscape for your product and the recent market trends. Better yet, take the call as a catalyst to research the opportunity yourself. The more you know about the players, the pricing, the other possible partners, the more serious you will appear to the Japanese partner – and the better your ultimate strategy will be.

Finally, if you are interested in a relationship, prove yourself to be a worthy partner. The Japanese counterpart will be assessing how you fit with his company and colleagues. They love responsiveness, reliability, technical knowledge and attention to detail, especially in relation to customers; they are not impressed by hype. They also want to know that you will commit the necessary investment of time, people and money to be successful in Japan.

A knock at the door can be the opening to a great opportunity. But don’t underestimate how much ground you’ll have to cover before you reach your final destination.
This article originally appeared in Nikkei Weekly

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